Churches Hit by New Tax Law

Churches Hit by New Tax Law

Jonathan Ernst

Non-profits including churches and synagogues are being hit with a new tax thanks to a rule change that went into effect this year. The Republican tax legislation passed last December imposed a 21 percent tax on some employee fringe benefits, many related to transportation, including free parking and tax-free bus passes.

Some organizations are surprised to find that they now owe money to the IRS, Politico’s Brian Faler reports. One religious group cited by Faler, the Jewish Federations of North America, faces a $75,000 tax bill this year because of the change in the law, which was part of a broader effort to reduce tax breaks for employee benefits at all kinds of organizations.

More than 600 churches and other non-profit groups have signed a petition requesting a repeal of the new tax. “The cost of compliance, especially for churches that have small staffs or maybe volunteer accountants and bookkeepers — we don’t need this kind of hassle,” Galen Carey of the National Association of Evangelicals told Faler.

Rep. Michael Conaway (R-TX) introduced a bill earlier this month to revoke the new tax.